m



§ The practice of paying bonus in India appears to have

originated during First World War when certain textile
mills granted 10% of wages as war bonus to their
workers in 1917.

© In certain cases of industrial disputes demand for

payment of bonus was also included. In 1950, the Full
Bench of the Labor Appellate evolved a formula for
determination of bonus.

§ The Govt of India accepted the recommendations of

the Commission subject to certain modifications. To
implement these recommendations the Payment of
Bonus Ordinance, 1965 was promulgated on 29th May,
1965.
LIST m AMENDING ACTS

§ 1The insurance(Amendment) Act,

1968 (62 of 1968).
§ 2. The Payment of Bonus
(Amendment) Act, 1969 (8 of 1969).
§ 3. The Central Labour Laws
(Extension of Jammu And Kashmir)
Act, 1970
(51 of 1970).
§ . The Payment of Bonus (Amendment) Act, 1972
(68 of 1972).
§ 5. The Payment of Bonus (Amendment) Act, 1973
(39 of 1973).
§ 6. The Payment of Bonus (Second Amendment)
Act, 1973 (55 of 1973).
§ 7. The Payment of Bonus (Amendment) Act,
197(2 of 197).
§ 8 The Payment of Bonus (Amendment) Act,
1976(23 of 1976).
§ 9 The Payment of Bonus (Amendment) Act, 1977
(3 of 1977
§ 10. The Payment of Bonus (Second Amendment)
Act, 1980 (66 of 1980).
§ 11. The National Bank for Agriculture and Rural
Development Act, 1981 (61 of 1981).
§ 12. The Payment of Bonus (Amendment) Act, 1985
(30 of 1985).
§ 13. The Payment of Bonus (Second Amendment)
Act, 1985 (67of 1985).
§ 1. The National Housing Bank Act, 1987 (53 of
1987).
§ 15. The Small Industries Development Bank of
India Act, 1989 (39 of 1989).
§ 16 The Payment of Bonus (Amendment) Act, 1995
(3 of 1995).
 Appl
le of Bo
A

§ Any factory employing 10 or more persons where any

processing is carried out with aid of power

§ Other establishments (established for purpose of profit)

employing 20 or more persons.

§ Once the Act is applicable, it continues to apply even if

number of employees fall below 20. The Act is
applicable to Govt companies and corporations owned
by Govt which produces goods or renders services in
competition with private sector.
 D
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Bo
Not with standing anything contained in this Act, an
employee shall be disqualified from receiving bonus under
this Act, if he is dismissed from service for ±

(a) Fraud
Or

(b) Violent behavior while on the premises of the

establishment
Or

(c) Theft, misappropriation or sabotage of any property of

the establishment.
 x e
of M


Bo

§ Every employer shall be bound to pay to every employee

a minimum bonus which shall be 8.33 per cent of the
salary or wage earned by the employee during the
accounting year or one hundred rupees, whichever is
higher, whether or not the employer has any surplus in
the accounting year
 x e
of M

Bo
§ If the surplus exceeds the amount of minimum bonus
payable to the employees under that section, the
employer shall, in lieu of such minimum bonus, be bound
to pay to every employee in respect of that accounting
year bonus which shall be an amount in proportion to the
salary or wage earned by the employee during the
accounting year subject to a maximum of twenty per
cent, of such salary or wage.

§ In computing the surplus under this section, the amount

set on or the amount set off under the provisions shall be
taken into account in accordance with the provisions of
that section.
 Def



o x e
of
Bo A


 

§ In relation to a corporation, the year ending on the day

on which the books and accounts of the corporation are
to be closed and balances.

§ In relation to a company, the period in respect of which

any profit and loss account of the company laid before it
in annual general meeting is made up.
 I po

Def



o

÷



§ [Employee´ means any person employed on a salary

or wages not exceeding Rs.3,500 per month in any
industry to do any skilled or unskilled, manual,
supervisory, managerial, administrative, technical or
clerical work. [Section 2(13)]
 I po

Def



o
÷



§ In relation to an establishment which is a factory, the

owner of the factory, including the agent of such owner the
legal representative of owner and where a person has
been named as a manager of the factory under clause (f)
of Sub-section 7(1) of the Factories Act, 198, the person
so named.

§ In relation to any other establishment, the person who, or

the authority which, has the ultimate control over the
affairs of the establishment and managing director or
managing agent. 2(1)]
 I po

Def



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§ The ³Salary or Wage´ means all remuneration capable of

being expressed in terms of money, which would be
payable to an employee in respect of his employment or
of work done in such employment and includes dearness
allowance (that is to say, all cash payments, paid to an
employee on account of a rise in the cost of living).
 I po

Def



o
  
 
    


 
§ Any traveling concession

§ Any bonus (including incentive, production and attendance

bonus)
§ Any contribution paid or payable by the employer to any
pension fund or provident fund or for the benefit of the
employee under any law for the time being in force
§ Any retrenchment compensation or other retirement
benefit payable to the employee.
§ Any commission payable to the employee [section 2(21)]
Co p


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§ He has been absent due to temporary disablement

caused by accident arising out of and in the course of
his employment.

§ The employee has been on maternity leave with salary

or wage, during the accounting year.
T
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fo x e
of
Bo
All amounts payable to an employee by way of bonus
under this Act shall be paid in cash by his employer ±

§ Where there is a dispute regarding payment of bonus

pending before any authority within a month from the
date on which the award becomes enforceable or the
settlement comes into operation, in respect of such
dispute.

§ In any other case, within a period of eight months from

the close of the accounting year
 ºeove  of o de
f o  e ploe
§ Where any bonus is due to an employee by way of
bonus, employee or any other person authorized by him
can make an application to the appropriate government
for recovery of the money due.

§ If the government is satisfied that money is due to an

employee by way of bonus, it shall issue a certificate for
that amount to the collector who then recovers the
money.

§ Such application shall be made within one year from the

date on which the money became due to the employee.
 M

ee of e

e 
eo d  e

§ A register showing the computation of the surplus
referred to In clause () of section 2, in Form A.

§ A register showing the set-on and set-off of the surplus,

under section 15, in Form B.

§ A register showing the details of the amount of bonus

due to each of the employees, the deductions under
sections 17 and 18 and the amount actually disbursed, In
Form C.
 A

o
ppl
le
§ The employees of Municipal Corporation or Municipality.

§ Railway employees.

§ University and employees of educational institutions.

§ Public sector insurance employees, employees of RBI and

public sector financial institutions.

§ Charitable hospitals, social welfare organizations and defense

employees.

§ The Act does not apply to any institution established not for
purposes of profit.
 A

o
ppl
le

§ ÷mployees employed by an establishment engaged in any

industry carried on by or under the authority of any
department of the Central Government or a State
Government or a Local authority.

§ ÷mployees employed through contractor on building

operations.

§ The Indian Red Cross Society or any other institution of a

like nature (including its branches)
 I pe
o D

e :

§ An Inspector appointed under sub-section (1) may, for the

purpose of ascertaining whether any of the provisions of this Act
has been complied with ±

§ (a) Require an employer to furnish such information as he may

consider necessary;

§ at any reasonable time and with such assistance, if any, as he

thinks fit enter any establishment or any premises connected
therewith and require any one found in charge thereof to produce
before him for examination any accounts, books, registers and
other documents relating to the employment of persons or the
payment of salary or wage or bonus in the establishment.
 mffee & xel

e
1. For contravention of the provisions of the Act or rules the
penalty is imprisonment up to 6 months, or fine up to
Rs.1000, or both.

2. For failure to comply with the directions or requisitions

made the penalty is imprisonment up to 6 months, or fine
up to Rs.1000, or both.

3. In case of offences by companies, firms, body corporate or

association of individuals, its director, partner or a principal
officer responsible for the conduct of its business, as the
case may be, shall be deemed to be guilty of that offence
and punished accordingly, unless the person concerned
proves that the offence was committed without his
knowledge or that he exercised all due diligence.
 Th Yo
Hve  
e
A

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o

Presented by:-

Daljeet Kaur


 SIMT,Rdr